[Good Morning Stock Market] International Oil Price Surpasses $90... KOSPI Expected to Start Down 0.7%

On the 18th, the Korean stock market is expected to start lower. The continued rise in international oil prices is likely to influence sentiment, as concerns over a contraction in U.S. fourth-quarter retail sales may weigh on the Korean economy.

[Image source=Yonhap News]

On the 15th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 34,618.24, down 288.87 points (0.83%) from the previous trading day. The S&P 500, which focuses on large-cap stocks, fell 54.78 points (1.22%) to 4,450.32. The tech-heavy Nasdaq index ended the day at 13,708.33, down 217.72 points (1.56%).

The rise in international oil prices and weak U.S. economic indicators had a negative impact. West Texas Intermediate (WTI) crude oil prices surpassed $91 per barrel. Brent crude also exceeded $94 per barrel, marking the highest level since November last year. WTI prices closed slightly higher at $90.77.

Additionally, according to the University of Michigan Consumer Sentiment Survey, inflation expectations fell to 3.1% in September, the lowest since January 2021. The five-year outlook dropped to 2.7%, the lowest since December last year. These developments acted as negative factors for the U.S. stock market.

Han Ji-young, a researcher at Kiwoom Securities, said, "WTI oil prices breaking above $90 increased uncertainty about energy-driven inflation," adding, "The cautious sentiment surrounding the September Federal Open Market Committee (FOMC) meeting spread throughout the trading day, which is believed to have caused the correction in the U.S. stock market."

The KOSPI is expected to open down about 0.7% from the previous trading day. This is because the U.S. stock market declined, particularly in semiconductor sectors and AI-related stocks. Seo Sang-young, a researcher at Kiwoom Securities, said, "Although the semiconductor industry is recovering from the bottom recently, concerns have emerged that the pace of improvement may be delayed compared to the past." He added, "With international oil prices rising, concerns over a contraction in U.S. retail sales in the fourth quarter could act as a burden on the export-dependent Korean economy, which is also a factor dampening investor sentiment."

Especially, the upcoming FOMC meeting is also a burden. Researcher Han Ji-young explained, "The recent weakening of foreign net buying and valuation pressures centered on growth stocks stem from the strong dollar and rising interest rates," adding, "To resolve this, the September FOMC needs to be digested as neutral or more accommodative."